MGM shares get a boost from debt refinancing

NEW YORK (AP) -- Shares of MGM Resorts International jumped Thursday after the company announced $5 billion in new financing.

THE SPARK: Las Vegas-based MGM on Thursday launched a tender offer to repay more than $3 billion in existing debt due over the next several years with proceeds from a new $4 billion senior secured credit facility and $1 billion in new unsecured notes.

The move prompted Standard & Poor's Ratings Services to raise its non-investment grade corporate credit rating for the company to "B+" from "B-."

THE BIG PICTURE: The debt to be repaid includes $750 million of 13 percent senior secured notes due 2013, $650 million of 10.375 percent senior secured notes due 2014, $850 million of 11.125 percent senior secured notes due 2017 and $845 million of 9 percent senior secured notes due 2020.

S&P said that while MGM will still have a high level of debt, the refinancing will lower its interest costs and help generate cash flow that it can use to repay more debt down the road.

THE SHARES: Up 93 cents, or 9 percent, to $10.90 in heavy afternoon trading after peaking at $10.94 earlier in the day. Over the past 52 weeks, the company's shares have traded between $8.83 and $14.94.

With Thursday's gains, the stock is up about 4 percent for 2012.